Oracle Profit Tops Estimates, Sales Lag

Oracle Corp., the largest maker of software for corporate databases, reported profit that topped analysts’ estimates as acquisitions in networking and cloud computing helped accelerate growth.

Profit, excluding some items, for the first quarter ended Aug. 31, was 59 cents a share, Redwood City, California-based Oracle said Wednesday in a statement. That topped the average analyst estimate of 56 cents, according to data compiled by Bloomberg. Adjusted sales rose 2.1 percent to $8.38 billion, trailing analysts’ average $8.48 billion projection.

Chief Executive Officer Larry Ellison is counting on acquisitions to fuel expansion after heightened competition led to a year of stagnant sales growth. Oracle purchased Acme Packet Inc. and Tekelec in communications equipment and software and Eloqua Inc. in online-marketing software to add to its product suite, which includes databases and business applications for financial management.

“They have a business that gets very entrenched into people’s businesses,” said Stephen Yacktman, co-chief investment officer at Yacktman Asset Management Co. in Austin, Texas, which owns more than 20 million Oracle shares, according to a June 30 filing. “They get pricing power because of it.”

Oracle shares fell more than 3 percent in extended trading to $32.80 after gaining 1.8 percent to $33.87 at the close in New York. The stock has advanced 1.7 percent this year, compared with a 21 percent increase in the Standard & Poor’s 500 Index.

Chief Financial Officer Safra Catz was expected to provide a forecast for the fiscal second quarter on a later conference call with analysts.

Oracle’s results follow two consecutive lackluster reports for the last half of fiscal 2013. Ellison announced sales and technology partnerships with Salesforce.com Inc. and Microsoft Corp. in June designed to make his company’s products easier to use alongside other software.

In July, Oracle released its new database designed for businesses running cloud applications. At its annual OpenWorld conference scheduled for next week, Ellison will introduce an add-on product that lets customers run their applications using faster computer memory instead of magnetic disk drives, he said in today’s statement.

The update, designed to speed software performance, bolsters competition with SAP AG’s high-speed database called Hana. Oracle executives are scheduled to discuss financial goals for the year with analysts on Sept. 26.